\u3000\u3 Shengda Resources Co.Ltd(000603) 885 Juneyao Airlines Co.Ltd(603885) )
Event: the company released the annual report of 2021. In 2021, the company achieved an operating revenue of about 11.77 billion, a year-on-year increase of 16.5%; The net loss attributable to the parent company was about 498 million, an increase of 24 million over the loss of 474 million in the previous year; The net loss of deduction of non return to parent was about 666 million, a decrease of about 5.19 million compared with the same period of last year (loss of 671 million).
China’s aviation demand recovered and China’s route ask rebounded. In 2021, the company’s ask (available seat kilometers) increased by 15.3% over the same period in 2020 and decreased by 12.0% over the same period in 2019. Among them, China’s passenger transport demand recovered well. In 2021, the ask of Chinese routes increased by 19.7% over the same period in 2020 and 5.5% over the same period in 2019; The supply and demand of overseas airlines are still at a low level. In 2021, the ask of international routes and regional routes decreased by 91.6% and 68.3% respectively compared with the same period in 19 years. The company’s comprehensive seating rate in 2021 was 75.7%, an increase of 0.46 PCT over the same period in 2020 and a decrease of 9.58 PCT over the same period in 19 years. In 2021, the aircraft utilization rate of the company was 8.35 hours, with a year-on-year increase of 0.3 hours. By the end of December 2021, the company had operated 110 passenger planes (including nine yuan Airlines), an increase of 12.2% over the end of 2020, higher than the growth rate of the same period last year (2.1%).
Passenger kilometer revenue rebounded, and passenger revenue increased year-on-year. In 21 years, the company’s revenue per passenger kilometer was about 0.409 yuan, with a year-on-year increase of 2.2% and a decrease of 12.7% compared with the same period in 2019. Under the influence of comprehensive volume and price, the company achieved a passenger revenue of 11.11 billion yuan in 2021, an increase of 18.5% year-on-year and a decrease of 32% compared with the same period in 2019.
The impact of operating lease on the balance sheet is limited, and the sharp rise in oil price has a negative impact. The rental depreciation cost of the company’s 21 year cost items was about 2.52 billion yuan, a year-on-year decrease of 9.0%; The interest expense in financial expenses increased by about 240 million year-on-year. After simply calculating the impact of operating leases, the company’s depreciation, flight maintenance and financial expenses (excluding exchange gains and losses) in 21 years totaled about 3.77 billion yuan, a decrease of 1.4% compared with the same period in 2020. The negative impact of operating leases is limited. The annual average price of Brent crude oil in 2021 was about $70.9/barrel, which was significantly higher than that in 2020 (US $43.0 / barrel), putting great pressure on the company’s operating costs. The company’s aviation fuel cost in 2021 increased by 53.1% year-on-year, accounting for about 21.2% of its main operating costs. Based on the above, the company’s main operating costs increased by 14.7% year-on-year in 2021, lower than the revenue growth in the same period. Affected by this, the company’s comprehensive gross profit margin for 21 years was about – 0.11%, with a year-on-year increase of 1.59pct; In 21 years, the company’s operating loss was about 793 million yuan, with a year-on-year increase of 44 million yuan.
Increase the size of the fleet and boost the profitability of the company. The company plans to increase 3.3 billion yuan for the introduction of aircraft and standby engine projects and the repayment of bank loans. After the raised funds are in place, the company’s transportation capacity and business scale will be effectively improved. The company’s 22-year fleet plans to increase by 7 aircraft, with a slight decline in growth rate. The expansion of the company’s fleet is conducive to improving the route operation ability and further improving the company’s profitability and industry competitiveness.
Investment suggestion: the epidemic situation outside China is repeated, the recovery of air passenger transport demand is negatively impacted, and the company’s short-term performance is under pressure; With the continuous advancement of covid-19 vaccine / treatment technology, the demand for air passenger transport will gradually recover, and the company will return to the growth track. Considering that the covid-19 epidemic lasted longer than expected, we lowered the company’s net profit forecast for 22-23 years to – 130 million yuan and + 1.05 billion yuan respectively (originally + 540 million yuan and + 1.13 billion yuan), adding 1.4 billion yuan to the 24-year forecast; Based on the company’s future fundamentals will gradually improve, maintain the company’s “overweight” rating.
Risk warning: the duration of covid-19 epidemic exceeded market expectations; The sharp decline of macro economy leads to the decline of industry demand; Sino US trade frictions continue to ferment, and the RMB exchange rate fluctuates greatly; Crude oil prices rose sharply.
